Radio Sets Eyes on Podcast Profit

Less than a year after podcasting caught the public imagination, the radio industry is beginning to wake up and smell the money.

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Earlier this month, talk-show host Rush Limbaugh began offering podcasts of his shows for $50 a year, and competitors like The Dr. Laura Schlessinger Program may follow his lead. Meanwhile, commercial and public radio stations are trying to figure out where they fit in the podsphere and how they can make a buck by filling up your MP3 player.

“As with the first years of streaming audio and streaming station feeds, everybody is trying to stake out their place in the field right now,” said Sean Ross, a radio consultant with Edison Media Research.

Podcasting — recording digital audio and distributing it as an internet download — couldn’t be easier. All you need is a microphone, a hard drive and access to an RSS feed. (The ability to carry on an intelligent and entertaining monologue or conversation would seem to be a prerequisite, but if so, no one seems to be enforcing it.)

Hardly any radio stations use old-fashioned tape decks anymore, so producing a podcast is straightforward and cheap, said Phil Redo, vice president of station operations and strategy at the WNYC public radio stations in New York City.

“We’ve already been migrating to a digital environment, so (the cost) is really negligible,” said Redo, who reports that WNYC’s podcasts of its nationally syndicated show On the Media are being downloaded 15,000 to 18,000 times a week.

Legal issues are another matter. Even as iTunes joins the podcast world, the music industry still hasn’t figured out how to handle royalties for radio content bound for MP3 players.

That’s why Limbaugh — the self-proclaimed “industry leader in podcasting” — can’t podcast his entire show: He doesn’t have clearance to air “bumpers,” those snippets of rock music played between bouts of bloviating. “We’re always trying to … get permissions from various entities to include their work,” Limbaugh told listeners, “but we’re running up against a brick wall because so much piracy is going on out there.”

In Washington, D.C., the same legal constraints are forcing rock station WWZZ-FM/Z104 to podcast only short bits of its morning show, said program director Sammy Simpson.

WWZZ doesn’t have any immediate plans to charge for its podcasts, but Simpson acknowledged that there’s plenty of interest in using them to make advertisers happy. “The long-term game plan is to work clients in the programming, perhaps through sponsorship,” he said.

Washington all-news station WTOP, a sister station of WWZZ, has its own podcast — a special 15- to 30-minute daily news update for commuters — and would like to make money on it, too, Simpson said.

He’s skeptical, however, that listeners would be willing to pay for podcasts of ordinary programming. “If you’re just going to take a morning show, record it and offer it as a podcast, I don’t think that will be a very successful business model.”

But at least one U.S. commercial radio station — KFMB-FM/100.7 Jack in San Diego — is testing the pay waters. It’s charging listeners $5 a month to download its top-rated morning show.

Charging for content is an even more dicey issue in the public radio world, where stations don’t make a profit but do need to make a buck. Just this week, National Public Radio announced that it has stopped offering several shows for download on Audible.com and is reconsidering distribution plans. Jenny Lawhorn, a spokeswoman for NPR, which offers no-cost streaming of new and archived content, declined to say whether the network plans to charge for show downloads, as Audible.com had done, or boost exposure by offering podcasts for free.

In Los Angeles, public radio station KCRW-FM, which podcasts a whopping 22 shows and features, has found a potential solution to the moneymaking question. You know those underwriting announcements on public radio that sound like commercials? KCRW’s podcasts soon will have their very own faux ads, courtesy of local Lexus dealers.